welcome to "asia 7 days." i'm susumi shimokawa in tokyo. myanmar saw the formation of a civilian government in march after 300 years of military rule. the world is waiting to see if a real democracy emerges. the new administration has been holding dialogue with pro-democracy leader aung san suu kyi. it is also court forge new investors. the former prime minister was sworn in as the country's

president after general election last year. he says he will promote democratic reform and open up the country's economy. this is myanmar's largest city and former capital. there are signs that changes are taking place. newspapers with aung san suu kyi on the cover. that was illegal under the previous government. internet controls were suddenly relaxed last month. people can now view video sharing and anti-government websites. they were previously blocked by the government. at the same time, the government is actively encouraging foreign companies to invest and help develop the economy. myanmar's greatest appeal is its

labor costs, one of the lowest in asia. workers earn one-fifth of the average pay in coastal china making it an alternative production site. companies from south korea and thailand have already made inroads. china in particular has made massive investments, developing mineral resources, natural gas projects, and building pipelines. china now exerts significant influence in the country. decades of closed-door policies under military rule have battered the economy. the new administration says those years are over by emphasizing democratic rule, it also helps to encourage the united states and european countries to lift their economic sanctions. is myanmar on the path to real democracy? we asked aung san suu kyi how strong is the force for change? >> i think the president is very

desirous of positive change. but of course i do not know what the situation of the new government is. i think we've got to make it strong. this is our responsibility, this is our duty, to try to make it as strong as possible. we prefer to emphasize what is positive and to help the process along. we also are cautious about saying that change has taken place. >> reporter: the pro-democracy leader also spoke about whether she would participate in the government. >> such matters are very much things that have to be decided with the rest of the party. it's not something that i decide for myself. i think you have to be committed to the process of dialogue, and even sometimes when it is perhaps not everything that you might wish for, you still have to continue and try to make it more meaningful and more

substantial. >> reporter: aung san suu kyi participating in the administration could accelerate the move toward democratic rule. but many say the real test is what the government does about political prisoners. there are said to be more than 2,000 in the country's jails, and western countries are demanding their release. nine north korean defectors have started new lives in south korea. their escape to japan in a tiny boat was a perilous one, but coast guard officials say it does seem to have been carefully planned. >> reporter: the defectors, three men, three women and three children, flew out of fukuoka in southwestern japan on tuesday.

arriving at the airport, the group wore sunglasses and masks to conceal their identities and did not speak to reporters. the defectors were found in a small wooden boat off the coast last month. they had been drifting in the sea of japan for six days. japanese coast guard officials say they have since revealed their escape route. the group left the north korean port of odaejin on the night of september 8th. they had waited for a holiday when they knew sea patrols would be lighter. they headed east toward the 38th parallel line between the two koreas. their plan was to turn west once they crossed into south korean waters. but on day three, a powerful typhoon pushed their boat farther out to sea.

having lost control, they keep drifting e ining eastward hopin rescued by japanese. the richty vessel was not made for open water. why had they raised such a dangerous journey? japanese officials say the motive seems to be a yearning for a more affluent life. a man who identified himself as a leader of the group said he had worked as a fisherman for the north korean military. the escapees did not appear to be disparately poor. they were carrying several thousand u.s. dollars and some chinese currency. the leaders of the north korean army allowed him to keep some of the money he made fishing. he had enough to buy imported south korean and chinese goods. at the market he saw videos from overseas and heard talk about life outside the people's republic. convinced there was no future at home, he decided to seek a better life elsewhere.

another man told japanese officials he's a grandson of a former chairman north korean's supreme people's assembly but the man's claim is hard to verify. on thursday, the south korean unification ministry said north korea had demanded the return of all nine defectors. but south korea said it will respect the group's wishes and refused to hand them over. the government will now check their identities and motives for escaping before helping them to resettle in their new home. friday marked the tenth anniversary of the u.s. invasion

of afghanistan. the presence of foreign troops was supposed to be an exercise in rebuilding a nation. but after a decade of fighting, the taliban insurgency is regaining momentum and reconstruction has far to go. on october 7th, 2001, the united states and allied forces began air strikes in afghanistan. they said they were hunting osama bin laden, the alleged mastermind of the 9/11 attacks, who had been given shelter in the country. the coalition forces took control of the capital kabul in just one month. the taliban government fled to the hills. the foreign troops stayed in the name of nation building. as years passed, america's military bill climbed ever higher. so did the death toll. more than 1,800 u.s. service members have been killed in the war. bowing to public pressure, u.s.

president barack obama decided to pull out combat troops by 2014. >> and the afghan people will be responsible for their own security. >> reporter: but the taliban insurgency has regained momentum. afghan people have been frustrated by the slow pace of reconstruction and the lack of improvement in security. these taliban fighters are based in the eastern province of kunar. they say there are 30 members in the unit. they stay small and mobile to avoid detection. residents of a village gather to discuss the security situation. they voice strong criticism of the u.s. and the administration of president hamid karzai.

the backlash against the united states and disappointment at the afghan government is growing. this resentment is playing into the hands of militants. last month the u.s. embassy in kabul came under a sustained attack. the u.s. accused the taliban group which it said had ties with the pakistani government. kabul government is also pointing the finger. it said the killing of the former president rabbani was carried out in pakistan by a pakistani national. the commander of u.s. forces in

afghanistan, general john allen, urged islamabad to review its ties with militant groups. those ties were forged more than 30 years ago when the soviets invaded afghanistan. >> for us, we're doing the analysis to determine whether the isi in collusion with the insurgents inside pakistan are causing problems inside afghanistan. pakistan has to make decisions about its own relationship with those insurgent groups. >> reporter: the security situation in afghanistan continues to deteriorate. the kabul government and the u.s. now face the huge task of quelling the violence before the pull-out in 2014. now for an in-depth report, in the second part of our series on mongolia, we focus on the nomadic herdsman. this main industry used to be the main way of life in the country. now their numbers are falling

sharply. changing political systems and natural disasters have played a role. so has modernization. >> reporter: for the nomadic herdsmen of mongolia, life is a constant search for pasture and water. they move with tethered to the needs of their animals. their treks across the grasslands change from year to year. the destination depends on the condition of grass and the type of livestock. closely in tune to the rhythms of nature, they carry on a lifestyle that has lasted for centuries. but, change came in the mid 1950s with mongolia adopted the receive yet system of collectivization. lifestyle cooperatives were set up across the country. they controlled herd migrations and paid wages. in return, the nomads handed over set quota of meat, milk and

wool. this system offered security, prompting some of the nomads to live in settlements. but, the collapse of socialism also meant the end of the set-up. by 1991 almost all of the co-ops had shut down. suddenly nomads were thrown into a competitive market economy. it was now up to individual families to manage their livestock and sell the produce. the enterprising ones thrived but with no state support, many others struggled to survive. another disparity emerged. this one between fast-growing cities and rural areas which had little infrastructure. many herdsmen moved to the capital, ulan bator, looking for customers. the result was a disaster for the environment. this woman from japan's national

museum of ethanol gi has studied nomads more many years. she explains what went wrong. >> translator: the most important event in this shift to a market economy was the decision by nomads to move to the cities. they thought this was the only way to sell their product, so many herdsmen set up camp around the capital, especially those with large herds of livestocks. that caused environmental problems around the capital and other cities. another issue was cashmere. it was the commodity that sold for the highest prices in those days. this made nomads in rural areas heavily dependent on cashmere. cashmere is made from the hair of goats. goats eat grass from its roots. this put pressure on vegetation. people were doing what they had to in order to survive, but the country was unprepared for the transition. this led to the deterioration of the grasslands.

>> reporter: as the environment worsens, nomads suffered another blow. a series of harsh winters in mongolia devastated livestock. between 2000 and 2002, the government says about 11 million animals died. 10% of all livestock. those who lost their animals gave up the nomadic life and came to ulan bator looking for work. but, the capital was not ready to accept the surge in population. a shortage of jobs remains a serious problem to this day. this woman and her family lost their livestock ten years ago. they moved to the capital but she and her husband still have not found work. her husband became sick. 3 of their 5 children managed to

find jobs. this income earned at construction sites and diners is supporting the family. even now the flow of people into cities continues. by 2010, the nomadic population had dropped to around 15% and the herdsmen that remain wonder who will succeed them. this woman settled in ulan bator 13 years ago. she used to raise livestock with her husband but the transition to a market economy proved too difficult and she had moved to the city with two of her children. the children want to stay in the city after they finish school.

the eldest son married a childhood friend and has chosen to continue the family tradition with his father. every morning he milks the animals. then he drives 50 kilometers away to a place near ulan bator to sell milk. he is determined to remain a herdsman, but he doesn't know if his son will think the same way.

the nomad population will continue to fall. >> reporter: one reason is nomads can lose everything if hit by hard winters or droughts. it is as if somebody came and pushed the reset button on your computer. it's hard to start all over. in a way, nomads have lost much of their ability to cope with extreme changes in the natural environment. another reason nomad populations are dropping has to do with changing social values. it's the same around the world. urban life has many attractions. it is seductive. once you experience it, you're hooked. >> reporter: what problems will arise if nomads disappear all together? >> translator: if livestock disappear, weeds and other plants will take over the grasslands.

grazing animals eat weeds and limit their spread. that means the grass has a better chance to survive, and animals help more varieties of grass to grow. livestock are good lawn mowers. they are also good seeders as they move around with seeds stuck to their bodies. for 4,000 years this system has kept the grasslands in mongolia thriving. the steps are truly a part of the world's heritage. seeing the steps in this way will make mongolians proud. it will give the nomads a sense of purpose and encourage them to maintain and preserve their grass lands. >> as more time passes, the traditions of the nomads are being lost. the government is attempting to find ways to combine modern life

with the old. but so far, these efforts have created new hardships for the herdsmen and more problems for the environment. >> reporter: the gobi region has long been prime pasture land for the nomads. but change is coming to southern mongolia. the government is pushing ahead with two major construction projects in the region. both are linked to the development of one of the largest cold deposit mines in the world. one project is to build a new railway to transport coal from the mine. the other is to set up a large industrial park in the south. currently almost all mongolia's natural resources are exported as raw materials. the government wants to establish factories so the country can process these resources and extract more value.

the industrial park will be built in sainshand, major rail junction on the new coal line. under the government's plan, the industrial park will transform saindland into an ecotown. the new railway will mean less trucks. surrounding areas will be reserved as nomadic pasture. the goal is to promote modernization while also protectiprotect

ing nomads and the environment. but, local nomads are worried. more and more trucks are crossing the steps to transport resources. the resulting ruts and exhaust gases are causing desertification of the grasslands.

water shortages have become a serious problem in this region. since the collapse of the camps. wells have not been maintained. nomads are depending more on rain and river water, but mine development is destroying water sources. it is also changing the flow of rivers and the quality of water in many areas of mongolia. the professor says if the groundwater dries up, the government's development plan may be in trouble. >> translator: if the government sets projects on too unreasonable a scale, it's certain to lead to water problems. if mongolia wants to ease overcrowding in the capital, it will need to tackle the problem on a national level. >> reporter: how can the modernization of mongolia and nomadic life be made compatible? the professor says the answer

lies in the country's traditions. >> translator: the solution is a mongolian word -- otor. it refers to a system meant to protect a family during harsh winters. under this system, some of the families stay in a settlement while the others go out to do nomadic pasturing. this is a traditional method. if this system can be adopted in conjunction with the industrial park, allowing some family members to go out herding, the steps can be maintained. >> is nomadic life still possible? >> translator: yes. the problems arise when people have livestock and stay in one place all the time. if some members of a family that owns livestock go out for nomadic pasturing, it is okay. it is not necessary or the whole family to be on the move. >> the mongolian government faces a big challenge in balancing the old and the new. other countries can cooperate by offering technology to help protect the environment. properly managed, there's still

hope that the heritage can be preserved. now, investigators say an automatic signaling system failed to function due to a power outage. it forced operators to shift to manual control. they say dispatchers issued orders without knowing the exact locations of the trains. they also blamed station staff for allowing a train to run without confirming that the track was clear. it ran into the back of another train injuring 295 people. 12 staff received disciplinary action. the united states is still considering weapons sales to taiwan, including new f-16

fighter aircraft. acting assistant defense secretary peter levoy signalled a possible deal during a grilling by lawmakers. the government's decision last month to upgrade taiwan's existing fleet of f-16s instead of selling the territory new jets drew criticism in the u.s. >> the f-16 retro fit proitz best bang for the buck at this time. it has been the higher immediate priority. >> reporter: l vvmt avoy says the u.s. is talking with taiwan and has not ruled out selling it the latest f-16s. china is opposed to any kind of arms sales to taiwan, whether new or used. the heaviest monsoon in decades has caused widespread flooding in northern and central thailand. rain has been falling since july.

the government says 244 people have been killed after 2.6 million people are affected. a famous temple in the asian capital is inundated. the water inside is more than one meter deep and threatens to topple its walls. a group of militants attacked three mining companies on the southern philippine island. about 50 rebels occupied a nickel mine complex for several hours in one province. the communist party of the philippines issued a statement saying its military arm, the new people's army, carried out the attacks. it says the firms cut down trees and use large amounts of sulfuric aez sit harming the environment. it says japanese executives ignored repeated requests to stop environmental destruction.

that's all we have time for this week. thank you for watching. we'll see you next week on "asia 7 days."